American consumers are feeling increasingly less confident these days as fears of an oncoming recession remain elevated. The Conference Board, a business research group, said Tuesday that its consumer confidence index fell to 102.6 from 104.3 in September.
Quick Read
- U.S. consumer confidence has decreased, raising concerns about a potential upcoming recession.
- The Conference Board reported a drop in its consumer confidence index to 102.6 in October from 104.3 in September.
- This index evaluates Americans’ views on present economic conditions and their six-month economic outlook.
- The sub-index assessing short-term prospects for income, business, and the job market decreased to 75.6 in October from 76.4 in September. Historically, readings below 80 for this sub-index have indicated an impending recession within a year.
- Despite the pessimistic future outlook, consumers continued robust spending through Q3, as noted by Dana Peterson, chief economist at The Conference Board.
- In September, consumer spending saw a significant increase of 0.4%, even after adjusting for inflation. However, such robust spending might not persist in the upcoming months, especially as the holiday season approaches, which could impact businesses adversely.
- Consumer spending is crucial, constituting approximately 70% of the U.S. economy. Hence, the sentiment of consumers is a vital indicator for the broader economic health.
- While spending remains stable, consumers are increasingly concerned about inflation, global conflicts, and other geopolitical factors.
- Despite an improvement in confidence earlier in the year due to inflation easing after 11 interest-rate hikes by the Federal Reserve, the recent dip showcases consumers’ hesitancy in spending on non-essential items, especially if it involves high-interest credit cards.
- The index reflecting consumers’ perception of the current economic situation also declined in October to 143.1, down from 146.2 in September.
The Associated Press has the story:
U.S. consumers feeling slightly less confident in October
Newslooks- WASHINGTON (AP)
American consumers are feeling increasingly less confident these days as fears of an oncoming recession remain elevated.
The Conference Board, a business research group, said Tuesday that its consumer confidence index fell to 102.6 from 104.3 in September.
The index measures both Americans’ assessment of current economic conditions and their outlook for the next six months.
The index measuring Americans short-term outlook for income, business and job market declined again, to 75.6 in October from 76.4 in September. Readings below 80 for future expectations historically signal a recession within a year.
“The continued skepticism about the future is notable given U.S. consumers — at least through the third quarter of this year — continued to spend heavily on both goods and services,” said Dana Peterson, chief economist at The Conference Board.
Spending by consumers rose by a brisk 0.4% in September — even after adjusting for inflation and even as Americans face ever-higher borrowing costs. However, economists warn that such strong spending isn’t likely to continue in the coming months, which would be bad news for businesses as the holiday shopping season ramps up.
Consumer spending accounts for around 70% of U.S. economic activity, so economists pay close attention to the mood of consumers to gauge how it may affect the broader economy.
Though they continue to spend, inflation, geopolitical conflicts and inflation remain at the forefront of American consumers’ minds.
Confidence improved late in the spring as inflation eased in the face of 11 interest-rate hikes by the Federal Reserve. But the recent downturn reflects consumer anxiety over spending on non-essential goods, particularly if they have to put it on a high-interest rate credit card.
Consumers’ view of current conditions also fell this month, to 143.1 from 146.2 in September.
